Limited Range

Commentary and Data Supplied by Dean Crist, Senior Economist, National Association of Home Builders (NAHB)Interest Rates: The prime rate has at an 18-monthly low — and it looks as if the mortgage rate is responding by dropping slightly as well. That should help move some bargain-hunters move off the dime and shrink the housing inventory. But the LIBOR jumped almost a full point — which will squeeze holders of adjustable-rate mortgages pegged to that index, as they reset. That may push foreclosures up, expanding the shadow market of empty housing being rented at fire sale rates. Building Materials: The price of softwood lumber has fluctuated over the last 18 months, but never by more than three percentage points — until this month, when it dropped 4.1 percent. Plywood prices also dropped 2 percentage points from the previous month. Gypsum and cement prices rose, but the overall “Materials and Components for Construction” category showed a drop of 0.7 percent. CPI vs. Rent: For the first time this year, the rise in the overall Consumer Price Index wasn’t higher than that of the rental segment. For that, you can thank falling oil prices, and the fact that slower consumer spending results in merchants dropping prices of the stock that’s not moving. Average Condo Price:Multifamily Starts: Starts are down to 247,000 units (seasonally adjusted annual rate), but that’s not the low for the past 12 months, surprisingly enough. Last December, the starts rate was at 211,000 units. The numbers have been all over the map since then, but they seem likely to stay in the mid-to-low 200,000-unit range for the immediate future. NAHB’s forecast for multifamily starts shows the numbers stalled in that range through 2009, with an upturn beginning in early 2010. That upturn, however, isn’t projected to move much beyond the 250,000 mark.To comment, contact keat.foong@nielsen.com.